A hypocritical Internet gambling ban

Home > Internet Casino News > A hypocritical Internet gambling ban

July 22, 2006

Protecting American family values -- or the offline industry? Gambling is one of the great successes of online commerce. Americans bet nearly $6 billion online last year, roughly half the global total

As someone paid to have a keen appreciation of risk, David Carruthers must regret his choice of travel agent.

The chief executive of BetonSports was flying to Costa Rica, but no sooner had he touched down in Texas to change planes than he was arrested and later charged, along with 10 of his associates and various companies, with racketeering, fraud and conspiracy.

This week the shares in BetonSports and other online gambling companies listed outside the U.S. plunged as the suspicion grew that, after years of inaction, prosecutors mean to close the industry down.

Much of Congress is on their side. Last week the House of Representatives voted to make it illegal to settle a bet with a credit card or wire transfer. Although the Senate is unlikely to make the bill law, the message is plain enough: Internet gambling is corrupting and illegal and should be stopped.

The congressmen's eagerness to demonstrate their uncompromising moral stance is more ironic than impressive. For the American campaign against Internet gambling is tainted by hypocrisy as well as futility.

Gambling is one of the great successes of online commerce. Americans bet nearly $6 billion online last year, Carruthers has estimated -- roughly half of the global total and four times as much as in 2001.

The card games, bingo and sports hosted safely outside the U.S. attract not just hard-bitten punters but also occasional gamblers out for some fun.

Burgeoning popularity might be taken as a measure of online gambling's value, but to legislators it is a symptom of its evil power. Online gambling, critics contend, feeds addiction, corrupts children, wrecks families, bankrolls criminals and launders money.

Internet betting on sports is unambiguously illegal and betting on card games probably so. The answer is as clear as the king of spades: Shut down the offshore industry that skirts today's rules.

Oddly, given the high moral tone, much of America's offline gaming industry agrees. Cynics suspect that this may be less a consequence of its concern for family values than of initial fears, fading now, that online betting would cannibalize the offline business. After all, one of the joys of online gambling is that you do not have to go to Atlantic City or Las Vegas to play. Industry special pleading helps square legislators' hostility to online betting with their willingness to allow online state lotteries and online betting on horse racing.

If prohibitionism really is driven by morality, then it is self-defeating. If you want to put the industry in the hands of dodgy dealers registered in Tuvalu or Vanuatu, if you want to guarantee Web sites without protection for children or restraints on compulsive gamblers, if you want to help money laundering and fraud, then prohibition is the policy for you.

There is another approach, which has been tested with online sales of alcohol and pornography, and been found broadly to work. Internet gambling operations know more about their punters than casinos do.

Owning a credit card is a good proxy for proof of age; each transaction is logged, so companies can tell who is betting excessively or at odd times of the day; they can tell where a computer is, and so abide by state laws.

Registered, branded, taxed gambling companies are not perfect protection against the excesses of betting, but they are the best there is.

Source: Hamilton Spectator

Discuss this News with other readers.